Deep ploughing radio and television track for 20 years, ushered in a high-quality development inflection point. The company layout ultra high definition 4K/8K whole industry chain, the customer resources are extensive, the benchmarking case is rich, develops the international market actively, the digital TV system and the service, the security product plate is the top priority of the future development, under the background of shrinking the low gross margin business, the company's comprehensive gross profit margin is expected to increase steadily in the future. In addition, the company's balance sheet is very healthy, and a number of financial indicators show significant signs of improvement.
Master video underlying hard core technology, lead AVS domestic coding standards, and open up a broad space for 5G video applications. The company is the leader of domestic video hard coding technology route, through the pyramid form of video underlying technology to support product high performance indicators. Sustained high R & D investment tamped the moat, and the proportion of R & D investment remained stable at 26%, 27% after adjustment. As the forerunner of AVS domestic coding standard, as the company's 5G + UHD 4K/8K benchmarking cases continue to hit the ground, we expect the demonstration role to gradually produce butterfly effect. From the perspective of long-term outlook, the company's core technology is expected to achieve dimensionality reduction and expansion, opening up a broad space for 5G video applications.
Triple technology protects the security of video content, and the scarcity qualification supports the outbreak of live star business in three years. The company has a trinity UHD content protection system that protects data transmission link security through CAS/DCAS, DRM protects content security, and digital watermarking ensures copyright traceability. CAS is the birthplace of the company's business, and DCAS has the advantages of natural technology and customer base. Relying on the scarce business qualifications, Live Star DCAS business is expected to support the company's continued performance in the next three years.
Bohui Science and Technology focuses on audio-visual big data, the customs department is about to create a board, and the company holds a stake of 14.98%. On November 4, 2019, Bohui Technology disclosed its prospectus and was accepted by the Shanghai Stock Exchange. in the future, if Bohui Technology successfully enters the board, it will probably bring higher investment returns to digital technology. no, no, no.
Profit forecasts and investment advice. Cover for the first time, giving a "buy" rating. We estimate that the company's income from 2019 to 2022 will be 1.005 billion yuan, 1.246 billion yuan, 1.884 billion yuan and 1.634 billion yuan, and the corresponding return net profit will be 73 million yuan, 321 million yuan, 708 million yuan and 603 million yuan respectively, and the compound growth rate of home net profit from 2020 to 2022 will be 37%. Considering the company's technical barriers, rich customer resources and broad growth space in the UHD video track. The target market value of PEG is 15.4 billion yuan in 2020. Under the cautious, neutral and optimistic assumptions, the long-term market capitalization space of the company is 15.9 billion yuan, 25 billion yuan and 38.6 billion yuan respectively.
Risk hints: the risk that the progress of industrial investment and policy implementation is lower than expected; the risk of technological renewal; the risk that the macro environment is lower than expected.
